Budget Giving A Greater Tax Cut For Parents And Continues Investing In Families – Prime Minister Robert Abela

During a press conference at the Auberge de Castille following the presentation of Budget 2026, Prime Minister Robert Abela announced a landmark measure aimed at easing the financial burden on working families.

Prime Minister Robert Abela revealed that Malta will see the emergence of a middle class of parents with two or more children, each earning up to €30,000, who will no longer pay any income tax within three years. “This means that these parents will effectively remain tax-free for almost a quarter of a century,” he declared. Parents with one child will also benefit from a significant reduction in tax rates.

The Prime Minister described the measure as “unprecedented in a generation”, emphasising that while many European economies face stagnation and austerity, Malta continues to strengthen its social and economic framework. “This is a budget that gives peace of mind a government that stands by you when you start a family, when you raise children, and as you grow older. Because with strong families, we build a strong economy,” said Prime Minister Robert Abela.

The budget also includes a €120 million social package aimed at supporting those most in need. A single parent with two children on the minimum wage will see their income increase by €650 through an enhanced In-Work Benefit and a higher Children’s Allowance.

Pensioners across Malta and Gozo are to benefit from the eleventh consecutive pension rise, which will be double the cost-of-living adjustment. Additional increases will go to widows and those born before 1962, as the government continues to address injustices dating back to 2006. The budget also provides a 15% increase in student stipends and a higher grant for Gozitan students studying in Malta.

Turning to business, Prime Minister Robert Abela highlighted continued support for enterprises through targeted incentives. He said Malta is now “on the threshold of a total transformation”, with the upcoming Malta Vision 2050 to be launched early next year setting out ambitious goals for the nation. These include placing Malta among the global leaders in human development and ensuring that family income and life satisfaction rank among the highest in Europe.

To realise this vision, the government will invest heavily in technology, skills, and innovation, including a €100 million fund for the digital switchover and the adoption of artificial intelligence across society.

Deputy Prime Minister Ian Borg praised Budget 2026 as one that builds on Malta’s recent achievements, ensuring that economic stability translates into a better quality of life. “Our people have always managed to rise above challenges and reach their goals. The economic success of recent years is unprecedented a success achieved through unity and hard work,” he said. “Yet the challenges ahead demand a strong, collective commitment. This budget provides the tools to continue moving forward together.”

Minister for Finance Clyde Caruana added that the Budget reinforces the government’s role as “a guarantee for the people”. He described it as a bold and responsible plan, built on “well-studied, forward-looking measures” that will shape the future of Maltese and Gozitan society.

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